The Decentralized Data Ecosystem
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The Origins of Data Storage
More bytes of data exist in the world than stars in the observable universe. The world of data has seen progress at an unprecedented pace, thanks to incredible technological and computational advances. But how did this come about, and where are we heading?
Before the web, data was stored locally. This meant all files and documents were sent to a computer’s physical hard disk drive. In the beginning, this was sufficient for most cases. But rapid digitization, the rise of new websites, and internet data drove a need for more data storage. Server computers started taking up more and more space in rooms, and information proliferated like never before.
Then came the cloud. Cloud storage allowed anyone to store their data on ever-enlarging server computers. Now, anyone could “rent” storage on a server farm or data center, and everything was reachable via an internet connection. But with bigger storage came bigger risk. Data breaches still pepper the news. People started seeking a solution to the problems that arose as a result of centralization – data located in a single warehouse was extremely susceptible to hacks.
Blockchain became the answer to the centralization problem, and the idea of decentralization has reshaped the industries of finance, science, and many more, hoping to add a spirit of security and fairness. Now, decentralization is happening to the internet, and even today’s internet is relatively new. Web1 came first, where files were read-only and everything was static. Web2 is the system we’re familiar with, which allows us to store data on clouds and edit in real time via a read-write system. Web3, however, is a read-write-own system. The “own” aspect casts a spotlight on the inherent value in data and seeks to allocate that value fairly through the impartiality of the blockchain. Web3 has its own fascinating story, and you can read more about it here, but for now, let’s dive into the issues with Web2, or today’s internet, as well as their implications for data.
Decentralized Data
Like most other industries, the data ecosystem still largely exists on Web2. But one of the biggest issues with Web2 data is that of consent theater. Do you own your data, or does Facebook own it, since you agreed to it in their Terms and Conditions? Recently, a terrifying John Oliver episode demonstrated just how much information data brokers know about us because of our “consent” to bogus contracts, as well as how easy it is for anyone to obtain that information.
One possible solution to the problem of consent theater lies at the intersection of data storage and Web3 – decentralized data. This budding movement aims to make data more valuable, more secure, and more rewarding. The ecosystem is constantly changing, but it’s safe to say that a few prominent niches have formed within the decentralized data space.
Data Storage
One niche that’s emerged is decentralized data storage, which promises the immutability benefits of blockchain. Some projects focused on decentralized data storage are:
If someone wants to store a file, these protocols will encrypt and split that file into small pieces, distributing them over the entire network. People who store pieces of that file, i.e. run nodes on the network, are rewarded with cryptocurrency or some kind of value token. The Interplanetary File System (IPFS) is also a notable project in this niche, storing a decentralized version of the internet.
Data Ownership
Other projects emphasize the “own” aspect of Web3. Decentralization has allowed the rise of an ownership economy, and data ownership protocols are an excellent example. This niche casts a spotlight on individuals’ data, emphasizing that one’s data (e.g. the websites they visit, their browsing patterns, etc.) is valuable. Some projects that allow web surfers to earn money for their data while browsing are:
Previously, enabling cookies on a browser was enough to hand over this data to advertisers. But participating in projects like the above allow us to reap the inherent value in our data, since it belongs to us. These initiatives support the idea that if we decide to submit our browsing habits to companies’ advertising algorithms, we should be rewarded. Ideally, they would pay us for it. And decentralized data ownership allows for innovation in other fields, too. Projects such as Fleming Protocol allow patients to obtain value from the health data they provide, encouraging scientific research and collaboration.
Data Marketplaces
Individuals’ data is valuable. Companies know that. For commerce providers, finding out more about someone’s online shopping preferences can mean the difference between selling a product or not. For GPS companies, big data has paved the way for richer insights, whether it’s Google Maps better pinpointing real-time traffic, or Garmin monitoring where road accidents occur most often in order to shorten emergency response times. With the newly increasing supply of data enabled by decentralized data ownership companies, data marketplaces connect that data to where it’s needed. Many data marketplaces have emerged for all kinds of purposes, some including:
These all aim to connect supply and demand via a decentralized data exchange platform. For instance, with Streamr, a rare disease researcher can now pay for and obtain a diagnosed patient’s case study listed on Fleming Protocol, even if the researcher and the patient are on opposite sides of the globe. And for companies who want to advertise smarter, they now have a platform to purchase consumer data from those willing to provide it.
A Bridge to the Future
Finally, companies such as Weavechain hope to bring everything – and everyone – together. They’re a decentralized big data protocol that attaches to and transforms any existing Web2 database (MySQL, Oracle, MongoDB, etc.) into a Web3-friendly package, with hashes that can be stored on any blockchain. There’s no rip-and-replace, so companies can continue operating within their legacy systems without costly and time-intensive migrations.
From there, the data has many possible paths and now boasts Web3 properties. It’s now immutably stored with full data lineage and built-in monetization, so it could be sold or shared. And with robust permissioning controls, collaboration is easy, and greater insights are never too far away.
The endless collaborative possibilities open a new chapter. They might include, for example, automotive companies aggregating their customers’ driving data into one massive dataset to uncover new habits about the global driver population. Architects could use Weavechain to design a safer and faster method of constructing buildings. Where Ocean Protocol might bridge the gap between supply and demand, Weavechain bridges the gap from Web2 to Web3, integrating the decentralized data ecosystem and propelling data into the future.
A final note – decentralized data is still a developing space, and there may be overlap between the niches I described. Only time will tell if they truly distinguish themselves from each other, or if some of them are swallowed or replaced by others. I’ve probably left out a few companies and data protocols as well; please feel free to respond to this post with any relevant platforms and projects. After all, the decentralization movement is always bursting with the latest new technologies! That said, I hope this article offered a broad overview of the decentralized data ecosystem and its current key players.
We’ve come a long way since hard disk drives, and the future is exciting! When the decentralized data ecosystem truly takes off, we might witness an unprecedented global efficiency of cooperation, which has always been one of humankind’s most incredible feats. Who knew an Excel sheet had so much power?
To learn more about how Weavechain can help your organization:
Drop us a line at hello@weavechain.com
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